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Google and Apple slash App Store pricing for developers

Apple and Google are overhauling how they charge developers for subscription apps, while Apple is also bringing display ads to the App Store for the first time.

Apple and Google's fierce mobile rivalry is no secret to anyone, and it's no surprise - both companies have hundreds of millions of active users, which is a huge potential market to tap into for any developer.

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It's the sheer size of the market that's the potential lure for developers wanting to build apps on either (or both) platforms. Simply, it was the size of the opportunity that allowed both companies to take 30 per cent of revenue from all apps across the stores, regardless of whether they were subscription or one-time purchases.

Now, Apple's revealed just ahead of its Worldwide Developers Conference (WWDC) that it's going to reduce its cut to 15 per cent. The catch is that the user needs to have been a customer at the full 30 per cent rate for a year before the reduction would come into effect.

Almost as soon as Apple could finish announcing it, via The Verge, Google trumped it by confirming it would offer the same deal to developers - but without the mandatory year sign-up before the 15 per cent rate comes into effect.

It is unlikely that consumers (and developers) will welcome the news about paid ads in the App Store though. It can already be confusing to try to browse through the store when looking for a new or interesting app, particularly if they're largely unheard of.

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Putting paid placements in the way of this has the potential to make things worse. However, Google also includes paid ads from its network on the Google Play Store, so the majority of the world's smartphone users may already be used to it.

To some extent, developers are the more important part of the equation for both Apple and Google - they're the key to more new, quality apps, and therefore users - so it's unsurprising to see both companies slash the cost of recurring membership charges.

It likely would have been welcomed more vocally had it not come with the bittersweet announcement about ads, which will frustrate both consumers and developers that don't have a huge budget to spend on launch day ads.